Supreme Court rules against Pueblo man in Wells Fargo case

Wednesday

The U.S. Supreme Court has unanimously ruled against a Pueblo man who claimed that federal debt collection laws should have protected him from a law firm trying to foreclose on his home.

Dennis Obduskey's lawsuit argued the Federal Debt Collection Practices Act should apply to a law firm working for Wells Fargo that attempted to foreclose on his house in Bailey.

The high court listened to oral arguments on Jan. 7 and handed down a 9-0 ruling Wednesday that disagreed with Obduskey, saying law firms engaged in non-judicial foreclosures are not traditional "debt collectors" under the federal law.

In an opinion written by Justice Stephen Breyer, the court noted that it agreed to hear Obduskey's case in order to settle conflicting decisions from different federal appeals courts on whether the federal debt collection law applied in such cases.

Breyer added that Congress is free to broaden the debt collection act in the future, but that existing law does not cover Obduskey's objections.

"I'm disappointed as far as my own case is concerned but the court points out this can be fixed by legislation and I remain determined to stop some of these abusive practices," Obduskey said Wednesday from his South Side home.

A Pueblo native, Obduskey was living in Bailey in 2009 when he defaulted on his mortgage, beginning a multi-year legal fight between him, Wells Fargo, and the law firm of McCarthy & Holthus.

The case was closely watched by law firms that do non-judicial foreclosures for lenders. Those are foreclosures that aren't supervised by a court. Colorado is one of 29 states that allow them.

Obduskey resisted foreclosure on his Bailey house by arguing that McCarthy & Holthus wasn't following the debt-collection regulations spelled out in federal law.

He insisted the law firm was no different than any debt collector, and had to follow the law, such as providing him with an agreed-upon amount of debt.

Obduskey's argument failed at the district court level and at the 10th Circuit Court of Appeals. Still, other courts had given conflicting decisions on how the federal law applied to non-judicial foreclosures.

In a concurring opinion Wednesday, Justice Sonia Sotomayor said the "thorny" issues raised by Obduskey remained serious despite the 9-0 opinion against him. She said nothing in Wednesday's ruling should be read to allow law firms and parties involved in non-judicial foreclosures to engage in abusive practices.

proper@chieftain.com

Twitter:@RoperPeter

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